Half of the companies have been forced out! The engineered wood panel industry is bidding farewell to its era of rapid, unregulated growth and entering a new phase.

2026-09-14 Source: China Green Times

According to monitoring data from the Industrial Development Planning Institute of the National Forestry and Grassland Administration, by the end of 2025, the country will have more than 7,500 operating man-made board manufacturers, a year-on-year decrease of 12.8%, with a combined annual production capacity of 382 million cubic meters, up 8.41% compared with the previous year. Among them, Plywood The number of manufacturing enterprises decreased by 16.8% year on year, Fiberboard The number of enterprises decreased by 8.3% year on year, Particleboard The number of manufacturing enterprises declined by 5.6% year on year. Overall, the industry is characterized by expanding production capacity amid a reduction in the number of firms.

Zhang Zhongtao, a professor-level senior engineer at the Industrial Development Planning Institute of the National Forestry and Grassland Administration, stated that as of the end of June this year, China’s plywood and fiberboard industries have seen a further decline in the number of enterprises, with total production capacity remaining broadly stable; meanwhile, the particleboard industry has experienced stabilization in both the number of enterprises and production lines, while the growth rate of total production capacity has slowed.

“At present, the engineered‑wood panel industry is under pressure to cut capacity and restructure—conditions unseen in the past two decades,” said Yu Wenji, chief scientist at the Chinese Academy of Forestry. He added that, as the real estate sector adjusts and traditional industries grapple with overcapacity, the furniture and home‑improvement sectors—being downstream industries—typically lag behind the housing market by one to two years in terms of economic performance.

In the first half of this year, the furniture manufacturing sector recorded operating revenue of RMB 257.61 billion, down 8.6% year on year; total profits amounted to only RMB 4.57 billion, a sharp decline of 52.7% compared with the same period last year. Meanwhile, the wood processing and wood–bamboo–rattan–palm–grass products industries saw their profits fall by 33.7% year on year.

“For more than 20 years, the custom furniture industry has faced such a situation for the first time,” said Zhang Ting, Chief Engineer of Sophia Home Co., Ltd. According to the company’s semi‑annual report for 2026, revenue across the sector has declined collectively, while profits at leading companies have been cut in half.

“Revenue decline is primarily driven by a drop in order volumes, with overall demand contraction posing a shared challenge across the industry,” said Zhang Ting. He added that the sector has entered a period of profound adjustment, navigating a difficult phase characterized by trading price for volume. As the most sensitive segment in the post‑real‑estate cycle, the custom‑furniture industry suffered particularly heavy losses in the first half of the year.

“In 2020, there were over 16,000 man-made board manufacturers nationwide; by the end of 2025, nearly half may have been phased out or undergone significant restructuring. The industry is undergoing a painful transition from sheer scale expansion to strategic transformation,” said Wu Xiumei, Chairwoman of Hebei Bamaillon Wood Industry.

Although the engineered‑wood panel market is currently undergoing a period of transformation, experts, scholars, and industry players remain optimistic about its prospects: the fundamental factors underpinning the sector’s broad growth potential have not changed.

“China is the world’s largest producer, consumer, and importer/exporter of wood-based materials and products, having maintained its top position for 20 consecutive years,” said Yu Wenji.

In the inaugural year of the 15th Five-Year Plan, favorable policies continue to be rolled out. The Outline of the 15th Five-Year Plan calls for tailoring real estate policies to local conditions, adopting a multi-pronged approach to stabilize market expectations, and fully unlocking the potential of both rigid and improvement‑driven housing demand. It also supports age‑friendly renovations and smart upgrades of older residential buildings, while promoting the development of safe, comfortable, green, and intelligent “good homes” through initiatives to enhance housing quality and improve property management services.

The “15th Five-Year Plan” for Urban Renewal explicitly calls for advancing the development of “high-quality housing.” It aims to elevate housing standards, design, materials, construction, and operation‑and‑maintenance practices across the entire value chain, thereby building and renovating safe, comfortable, green, and smart homes. Furthermore, it will continue to promote the renovation of older urban residential neighborhoods.

“China’s timber supply and demand have long been in a state of ‘tight balance,’ and discarded wood resources constitute an important ‘second forest resource.’ By leveraging technological approaches such as physical, chemical, and biological treatments, the value of waste wood materials can be significantly enhanced.” According to Professor Li Xingong of Central South University of Forestry and Technology, the high-value, circular utilization of waste wood resources is one of the key pathways toward achieving high-quality development in the wood industry.

Huang Baohong, General Manager of Hebei Donghai Xuri Wood Industry Co., Ltd., hopes that the man-made board industry will further implement the “reverse invoicing” policy in the field of resource recycling, thereby promoting the more effective recovery and reuse of used furniture and wood products from urban areas.

Lü Bin, director of the Wood Industry Research Institute at the Chinese Academy of Forestry, analyzes that stock renewal, quality upgrading, and market expansion constitute the industry’s primary development pathways at present. Enterprises must place a high priority on product quality, uphold strict quality standards, align production with sales, and refrain from engaging in destructive price wars. They should also enhance the supply of high‑value products, such as premium‑grade… Engineered wood , plywood, and high‑frequency‑use architectural plywood formwork, among others. We will further tap into the market and expand into application areas such as military‑industrial products, packaging for large instruments, food and gift packaging, bathroom cabinets, and balcony furniture. At the same time, we will advance digital and intelligent upgrades by implementing precise control of process parameters, rigorous quality management across production steps, and smart, data‑driven operations, thereby enhancing production efficiency and product quality while reducing costs. In addition, we must also place great emphasis on bamboo materials and domestically produced… Chinese fir Applications in engineered wood panels.

Professor Yang Long of Southwest Forestry University has proposed that the innovative development of hybrid-structure engineered wood products requires closer collaboration among universities, research institutes, and enterprises across the industry–university–research–application continuum. This approach represents a crucial step toward addressing the current issue of limited diversity in board‑type structures.

Chen Yong, deputy director of the Institute of Forestry Science and Technology Information at the Chinese Academy of Forestry, stated that China’s wood-based panel industry is undergoing a transformation from quantitative expansion to qualitative improvement, characterized by a decline in the number of enterprises coupled with increased concentration of production capacity.

By 2025, engineered wood panel manufacturers and corporate groups will continue to pursue large-scale, intensive development, further increasing industry concentration. By the end of 2025, there will be 293 large-scale producers and corporate groups, with a combined annual production capacity of approximately 102 million cubic meters, accounting for 26.7% of the total industry capacity.

Regarding the upgrade path for the three major board types, Yu Wenji believes: “Particleboard capacity has already reached 70 million cubic meters, facing severe overcapacity pressures and significant industry consolidation. In the future, both capacity and brand concentration will further intensify, with cost reduction, quality improvement, and efficiency gains driving development; structural particleboard and bamboo particleboard will become key areas of focus. Fiberboard capacity has declined from 60 million to 40 million cubic meters, necessitating the introduction of more functionalized products—such as flame‑retardant, water‑resistant, formaldehyde‑free, and ultra‑thin variants. Plywood capacity has reached saturation, with its market share far exceeding the combined share of fiberboard and particleboard. Should prefabricated timber construction gain traction, demand for structural plywood is likely to surge.”

Liu Guangxin, a senior engineer at Suzhou Sufuma, has proposed a plan titled “Technological Innovation and Industrial Application of Complete Sets of Equipment for New Non-Wood-Based Artificial Boards,” arguing that accelerating the development of bamboo particleboard, rock wool inorganic fiberboard, and waste‑fiber recycled board can facilitate the conversion of various solid waste resources into high‑value, differentiated panel products.

“Today, the average number of in-store visits per consumer has dropped from 4.2 four years ago to just 1.8. Standing in stores and scrolling through their phones to make purchasing decisions are ‘AI-native’ consumers, who first scour reviews for negative feedback and then scan QR codes to verify authenticity. Consumers haven’t disappeared—they’ve simply moved to another digital interface,” said Wu Xiumei. She added that Xiaohongshu’s “Shiwoism”—a home‑decor theme boasting over 2 billion views—reflects a shift in consumer mindset: the focus has evolved from “buying a cabinet” to “the kind of life I want to live.”

Wu Xiumei candidly stated, “The target customers of businesses have changed, and the era of profiting from information asymmetry is over. Today, brick-and-mortar stores must focus on how to make themselves visible to consumers, while the industry competes on who can earn consumers’ trust.”

The above information is provided by China Wood Industry Network. Disclaimer: All content marked with a source attribution is either a reprinted article or posted by corporate users; this website reproduces such materials solely for the purpose of disseminating additional information. If any reprinted articles or images raise copyright concerns, please contact the authors for removal. Furthermore, with respect to user comments and other information, this website does not necessarily endorse their views nor verify the authenticity of their content.

Editor: Fang Fen